Delta Corporation, a prominent textile manufacturer based in South India, secured substantial loans from a consortium of banks to modernize its spinning and weaving units. The project was aimed at enhancing production ca

Study the techno-economic feasibility study of the project. Identify the major procurement needs and sourcing plans as per the detailed project report (DPR) Understand the procurement process as defined in the management systems. Review the procurement decision related documentation call for quotations, review mechanism, price comparisons, negotiations before awarding the contract for supply of materials and services Verify the documents for genuineness of the quotes received. Contact vendors of high value items to establish if the procurement process was implemented in spirit to Identify related parties in the vendors, if any. Review all procurement related documentation - Purchase Order, Delivery Challans, Weigh Bridge slips, taxes paid and goods received notes maintained at the company. Validate the veracity of the purchase documents with a special focus on duties and levies paid on the goods purchased, the transportation receipts and weigh bridge noting, etc. for any mismatch and inconsistencies. Cross verify the transportation documents from public sources like RTO, toll tax. Check for duplicate purchase orders for the same materials and services. Compare the landed cost of the materials and services with the current market trends and past price data for commodity items that are tracked independently. Research and review details of other business interests of the promoters and close family members. Verify the sources of funds for the other business interest of the promoters. Audit Findings: Errors in the purchasing process. Further company had infused funds in another project with an unrelated business interest, several transactions with related parties as suppliers of goods and services. Layer of purchase transactions instead of direct purchases. False quotations, duplicate purchase orders, fake transportation bills, Inflated of the project cost.